Amprius Technologies - Q2 2023

Transcript

Operator (participant)

Welcome to Amprius Technologies second quarter 2023 earnings conference call. Joining us for today's presentation are the company's CEO, Dr. Kang Sun, and CFO, Sandra Wallach. At this time, all participants are in listen-only mode. Following management's remarks, we will open the call for questions. Please note that this presentation contains forward-looking statements, including, but not limited to, statements regarding future product commercialization, new customer adoption, and timing and ability of Amprius to build large-scale manufacturing facility, expand its manufacturing capacity, scale its business, and achieve a sustainable cost structure. These statements involve known and unknown risks, uncertainties, and other important factors that may cause Amprius' results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied in such forward-looking statements.

For a more complete discussion of these risks and uncertainties, please refer to Amprius' filings with the Securities and Exchange Commission. Finally, I would like to remind everyone that this conference call is being webcast, and a recording will be made available for replay on the company's investor relations website at ir.amprius.com. In addition to the webcast, the company has posted a shareholder letter that accompanies these results, which can also be found on the investor relations website. I will now turn the call over to Amprius Technologies' CEO, Dr. Kang Sun, for his comments. Sir, please proceed.

Kang Sun (CEO)

Welcome, everyone, and thank you for joining us this afternoon. On today's call, I will report on our progress and accomplishments at Amprius in the second quarter, and our CFO, Sandra Wallach, will discuss our financial results for the period. After that, I will share some closing remarks before opening the call for questions. Our second quarter demonstrated our business momentum and growth potential. Amprius introduced new products and technologies, brought in more customers, and delivered increased revenue. Our battery performance continues to command a firm leading position in the industry, highlights the Amprius ability to provide 460 Wh/kg specific energy density and 1,160 Wh/L volumetric energy density, up to 10C power capability. The extreme fast charge rates of 0% to 80% state of charge in approximately 6 minutes.

A wider operating temperature range of -30 degrees Celsius, up to 55 degrees Celsius, and a safety design feature that enable us to pass the United States military's benchmark nail penetration test. Amprius has over 80 patents and extensive know-how in silicon anode and silicon anode manufacturing technologies, and it is our belief that there are no other commercial battery on the market that can perform at these levels. Amprius has been in commercial battery production since 2018, company has many years of shipping experience manufacturing high-energy density and high power density lithium-ion batteries. Our priority today is to scale our manufacturing capacity to meet the ever-increasing demand of our solutions, with the long-term goal of becoming a mainstream battery solution, with applications across all segments of electrical mobility, including the aviation and the EV industries.

Building our momentum from last quarter, we are diligently working to execute the strategy we laid out earlier this year. This quarter, we continued to develop new products, build out our book of customers, and progress on our path to large-scale commercialization. I would now like to note a few highlights in each area. Beginning with our technological development, our second quarter include a few key examples of our ongoing efforts to push the boundaries of what is possible in the high-performance battery space. First, early this month, we announced our newest product, the Amprius high-power, high-energy battery cell. This cell displays unprecedented performance in the industry, delivering 400 Wh/kg energy density and a maximum power density of 4,400 W/kg, with impressive 10C continuous charge rate.

Amprius' high-power cell technology is critically important to the electrical aviation industry, enabling the capabilities of EV cars and other high-performance electrical vehicles. We believe that we are close to shipping samples to interest partners, and that we will be able to commercially ship this product in early 2024. Secondly, our silicon anode battery system that powered the BAE Systems' first successful stratospheric flights. BAE Systems chose Amprius as its partner for its HAPS, uncrewed aerial system, demonstrates that we believe it's important to use an ultralight battery that also offers the necessary power to fly the aircraft. The HAPS program opens extensive possibility of a future communication networks, including 4G and 5G.

It is versatile applications from disaster relief to border protection, present a compelling alternative to conventional airborne or, and, satellite systems, and Amprius is excited to play a part in its future. Third, we complete the US Army safe cell development program, an important technical milestone to our business with the US Army. We successfully delivered over 390 Wh/kg safe cells with a gel polymer electrolyte, passing the rigorous military performance specification Nail penetration test. When integrated into a battery pack, this cutting-edge technology more than doubles the energy density of existing solutions, significantly extending mission time. Also, as a part of the US Army Funded Manufacturing Technology Program, we are working closely with one of our partners to deliver conformal wearable batteries to US Army before the end of the year.

We believe that this is an important step in school to further developing our relationship with the US military and specifically giving us entry points to the conformal wearable battery market, estimated at $1.25 billion by 2030. Finally, we have become an integral partner to several teams participating in the Bridgestone World Solar Challenge in October. For the event, each team designs, develops and pilots a solar-powered vehicle along a 3,000 kilometer transcontinental Australia route. Amprius batteries are superior performance attracts a significant attention for the teams entering the development process, and 4 teams chose Amprius battery to power their solar race cars. The high energy density and the high power density capability of our battery are critical for this application. These are just a few of the ways Amprius is changing the battery landscape.

We are constantly evolving our products to push our industrial boundaries and meet our customer performance goals. Turning to our business development efforts, we continued to see significant demand for our products in the second quarter. We shipped to 27 total customers this quarter, up from 16 in last year's second quarter, and up from 19 in the first quarter of this year. These customer relationships extended beyond technical engagements, and are with customers who have placed commer- product orders with Amprius. This includes repeat customers like Airbus, AeroVironment and Teledyne FLIR, who continue to show their support and demand for Amprius batteries with additional orders and commercial shipments. We shipped to 10 new customers in the quarter as well, which indicates growing industrial recognition and the validation of our products. In addition, our pilot pipeline of the potential customers remains strong.

Two key ways that we bolster our pipeline are through the strategical technical engagements and prototype shipments. In the second quarter, we not only show significant progress in our ongoing technical engagements, we also start new technical engagements with the leading high-performance automotive OEM. This engagement is expected to be part of the joint development contract we are finalizing with the manufacturer. Once finalized, we believe that this engagement will offer us another encouraging opportunity in the automotive space. As for prototype shipments, this quarter we made a site visits to two battery pack manufacturers, to whom we started shipping samples in the fourth quarter of last year. We believe that this visit serves as meaningful steps toward significant potential demand from the aviation industry through 2025 and beyond.

In addition to driving demand for our batteries, it remains a priority for our business to expand our production capacity to meet this demand. We believe that this is a critical part of our strategy, both in short term, as we work to expand our Amprius Lab in Fremont, California, and over the medium and the long term as we strive to achieve gigawatt-scale manufacturing with Amprius Fab in Brighton, Colorado. Amprius Lab will allow us to increase our production capacity to 10 times what it is today by year-end, providing enough capacity to both expand commercial shipments within our strategic accounts, as well as to ship samples to our pipeline of potential customers.

Our expanded Fremont production facility is designed to have a full lithium-ion battery manufacturing capabilities, including both anode and the cathode production, as well as the ultimate cell, cell assembly, enabling us to further develop our cathode technology and the cell chemistry in-house. In the second quarter, we ordered the necessary equipment to begin executing our Amprius Lab retrofit and expansion. A process that we are on track to complete by the end of the year, in hopes of having facility up and running entering 2024. We are also working diligently to meeting our project plan for Amprius Fab, our growth engine, which will allow us to reach high volume manufacturing capacity. As a reminder, our planned 774,000 sq ft large-scale production facility is a part of the total site with over 1.3 sq ft available for expansion.

Expect to be the first mass production site for the next generation battery technology in the United States. The initial phase of our build out will provide potential of up to 5 GWh, with expansion capability for up to total potential manufacturing capacity of 10 GWh. The Amprius Fab site is already equipped with electrical power and existing structural layouts needed for GWh scale lithium-ion battery factory, which will reduce our build out cost and time to market. We are now working through the rezoning and the site permitting processes, and believe we are on schedule to begin construction on Amprius Fab later in the third quarter as a part of our 18-24 months plan. Our goal is to be operational in 2025, and as of this call, we remain on track to meet this timeline.

This quarter, our engineering team worked with the Centrotherm in Germany to complete the necessary silicon nano anode mass production equipment, process testing, and optimization efforts. The process, once optimized, will be deployed at Amprius Lab's manufacturing line and ultimately at Amprius Fab. Both Amprius Lab and Amprius Fab will have high performance Amprius silicon anode battery manufacturing capabilities. I have one final update before I turn the call over to Sandra. We recently appoint Mary Gustanski as an independent director to our board of directors and our Compensation Committee. Mary is very versed in various challenges and opportunities in our industry, and offers a unique and a valued perspective to our board. We are confident that her extensive automotive sector and technical management experience will help us as we navigate and expand into new markets.

With that overview complete, I will now turn the call over to our CFO, Sandra Wallach, to review our financial results for the quarter. Sandra?

Sandra Wallach (CFO)

Thank you, Kang. I would now like to spend a few minutes covering some key financial updates. As a reminder, our detailed financials can be found in our shareholder letter. We finished the second quarter with $1.6 million in revenue, a $0.9 million increase compared to $0.7 million in the same quarter last year. There were two main drivers of this increase. First, we drove a $0.6 million increase in product revenue. As Kang mentioned, our product revenue was largely driven by shipments to 27 customers this quarter, a quarterly record for Amprius. Also, of these customers, five customers represented greater than 10% of revenue, as compared to three such customers last quarter, and two such customers in last year's Q2.

Even though our product revenue remains largely driven by customer purchase orders that can arrive at uneven times throughout the year, we have shown consistent new customer growth and diversification in recent quarters. Second, our development services revenue totaled $0.3 million, a reflection of the US Army safe cell delivery we completed in the quarter. As noted in previous quarters, our development services revenue is intermittent based on revenue recognition timing. As our capacity expands and more customers transition to commercial orders, we expect this revenue category to continue to decline as a percentage of overall revenue as we begin to process larger orders from a broader customer set, and as our product revenue ramps even more. Our government grant revenue was flat year-over-year for the quarter.

Moving to our profitability metrics, our GAAP gross margin was negative 186% in the second quarter, in line with our Q2 '22 gross margin of negative 197%, and better than our Q1 '23 gross margin of negative 518%, which was primarily impacted by non-recurring startup charges for our large-scale manufacturing facility. As the build-out continues and construction begins in earnest, we expect these scale-up related charges to increase. Still, we are confident that our GAAP gross margin will begin to normalize as we approach our capacity expansion goals in the coming years. Now on to our operating expense management. Our GAAP operating expenses for the second quarter increased to $7.1 million, largely due to increased public company costs and additional targeted investments in R&D staffing.

Our GAAP net loss for the second quarter of 2023 was $9.4 million, or a net loss of $0.11 per share. As of June 30, 2023, we had 86 million shares outstanding. Also, as of June 30, 2023, there were 72 full-time employees, with those employees primarily based in our Fremont, California, location. Our share-based compensation for the quarter was $0.9 million. Now, turning to the balance sheet, we exited the second quarter with $65 million in cash, up $0.8 million from the last quarter, and no debt. One of the key drivers of our cash activity for the quarter was $5.6 million used in operating activities. As discussed previously, our run rate for cash used in operating activities remains projected to be around $2 million per month, excluding audit and transaction-related expenses.

Other drivers include $1.7 million in build-out related investments in the expansion of our Amprius Lab facility in Fremont, and $8.1 million in financing cash inflow from accessing our Committed Equity Facility to fund our capacity expansion and operating cash requirements. Considering our business achievements and ongoing projects, we believe we are efficiently using capital to drive Amprius forward. Before I turn the call back over to Kang, I would like to take a moment to discuss our outlook. As mentioned last quarter, we have several ongoing development services programs with performance obligations that we expect to complete within 2023, which means we should see increased revenue recognition weighted more heavily towards the latter part of the year. Also, we anticipate that our G&A costs will continue at the higher rate we experienced earlier this year when accounting for additional public company and transaction-related expenses.

We continue to expect to be capacity constrained until we exit 2023, when our new 2 MWh capacity is projected to come online. That project, along with our build-out of Amprius Fab in Brighton, Colorado, remain our top capital allocation priorities. We believe that we are on track with our prior CapEx projections, which are that we expect to spend approximately $10 million-$12 million, completing the build-out of the Amprius Lab facility in Fremont by the end of the year, as well as $50 million-$80 million in the second half of this year as we start construction at Amprius Fab and begin to order long lead time equipment. We expect to confirm the facility design and scale, as well as provide a projected budget during the second half of this year.

Our spending pattern is dependent upon several factors outside of our control, including the timing of rezoning approval for the Colorado site. We expect to provide more specific projections as we have additional information to share. With the strength of our balance sheet and multiple vehicles to generate additional funding through both equity issuances, such as warrants and sales under our committed equity facility, and non-dilutive sources such as grants, loans, and incentives, we believe we will have enough cash to execute on our strategic plan. I will conclude the financial discussion and pass the call back to Kang.

Kang Sun (CEO)

Thanks, Sandra. I'd like to reemphasize a few key points before closing. First, Amprius silicon anode technology continues to demonstrate unmatched performance in the industry. Amprius batteries command a firm lead in safety, energy, power, charging time, temperature performance, and are uniquely positioned for the electrical mobility market. Second, Amprius batteries are commercially available today. We have been shipping commercial products since 2018, and our technological advancement continue to bring in significant customer demand. This quarter, we not only delivered to repeat customers and expand our technical engagements, we added 10 new customers as well. Our demand pipeline is robust, and we look forward to further building out our customer book in the coming quarters. Third, we are scaling our manufacturing capacity to serve the significant demand ahead. Exiting 2023,...

We will further pull out our largest scale manufacturing process and parameters with our 2 MWh production line at Amprius Lab in Fremont. We also remain on track to build out Amprius Fab, our gigawatt scale facility in Brighton, Colorado, which we expect to be operational entering 2025. Finally, we are looking forward to several exciting milestones over the rest of the 2023, before end of the year. We expect to secure customer commitments to fulfill Amprius Fab's expect production capacity for 2025, deliver 500 Wh/kg battery prototypes to select the customers, complete our MWh scale silicon anode battery manufacturing facility at Amprius Lab, and start Amprius Fab construction and complete our product line and the facility equipment purchases. As we look to the rest of the year, our strategy and focus at Amprius remains unchanged.

We have a tremendous opportunity ahead with a product portfolio that positions us to both growth in aviation market and expand it to other industries, seeking battery with leading performance. Opportunities in front of Amprius are enormous, including the $1.25 billion conformal wearable battery market by 2030, the $49 billion aviation market by 2025, and the $67 billion EV battery market by 2025, all of which are Amprius growth path in coming years. 2023 has been a very productive year for company thus far. Our solid performance in this quarter has demonstrated our team's ability to deliver what we have planned and promised. Thank you for your continued support of Amprius Technologies. I will turn it back to the operator for Q&A.

Operator (participant)

Thank you. At this time, we'll open the line for questions. The company requests that each participant limit themselves to one question and one follow-up. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star key. Our first question is from Colin Rusch with Oppenheimer. Please proceed with your question.

Colin Rusch (Managing Director, Senior Research Analyst, and Head of Sustainable Growth and Resource Optimization Franchise)

Thanks so much. You know, can, can you talk a little bit about where you're at from a testing perspective around the subsystems for the megawatt scale tool, and, and when you expect to really kind of just flip the switch and start running that, full out?

Kang Sun (CEO)

Yeah, Colin, we have a test. I assume you are talking about the Fremont operation here.

Colin Rusch (Managing Director, Senior Research Analyst, and Head of Sustainable Growth and Resource Optimization Franchise)

Correct, yeah.

Kang Sun (CEO)

At Fremont, we already finished the, almost the full test in Germany, at Centrotherm, who are our supplier for silicon anode deposition tool. We expect to transfer that move, that entire piece to Fremont. By the end of the year, we will have the equipment that part of the equipment in place. That's the key part of this entire manufacturing process. If we get that right, the rest of those are relatively easy.

Colin Rusch (Managing Director, Senior Research Analyst, and Head of Sustainable Growth and Resource Optimization Franchise)

Excellent. Then with the customers, you know, obviously adding, incremental 10 customers is, is an awful lot for the company at this point. Can you talk a little bit about, you know, what percentage of that is, are, are customers who are sampling, and, and how many of those are folks that are taking commercial product at this point for particular applications?

Kang Sun (CEO)

We, as a new customer, I think, approximately in terms of purchasing order, they all have purchasing orders, but for different purposes. Some for sampling, prototyping, some are really qualified our product. I would say 40% of those customers are really qualified our product and start purchasing for their commercial applications.

Colin Rusch (Managing Director, Senior Research Analyst, and Head of Sustainable Growth and Resource Optimization Franchise)

That's incredibly helpful. Then one for Sandra, just in, in terms of the, the cadence of the, the cash flow for the, for the balance of the year, how would you, you know, characterize, you know, the, the spend in terms of how much is going towards equipment orders, how much is going towards facilitization, and you know, how much is going in the third quarter versus fourth quarter?

Sandra Wallach (CFO)

We're going to keep our operating activities relatively flat as far as use of cash. We've got about $10 million-$12 million more to finish out Fremont. This is all dependent on timing, but the demand for the construction and the pre-ordering of the long lead time items...

... is estimated to be on the low end, $50 million, on the high end, $80 million, for Colorado.

Colin Rusch (Managing Director, Senior Research Analyst, and Head of Sustainable Growth and Resource Optimization Franchise)

Excellent. appreciate it. Thanks so much, guys.

Operator (participant)

Thank you. Our next question is from Chris Souther with B. Riley Securities. Please proceed with your question.

Chris Souther (Research Analyst of Sustainable Energy and Technology)

Hey, guys. Thanks for taking my questions. Maybe just on the performance, automotive OEM, can, can you give us a sense of the, the timelines we should expect for updates there? Can, can you share what you hope the goals of the joint development contract will potentially lay out? I'm, I'm just kind of curious from, you know, a high level standpoint, do, do you think this changes your potential timeline for commercialization in the automotive sector, or should we, you know, kind of temper the enthusiasm around that in the near term, midterm?

Kang Sun (CEO)

We are, we already engaged with this customer for some time. Now we would like to formalize the relationship, you know, which the step one would be joining the development program. This is very significant for us. You know, this is, a high performance, electrical vehicle manufacturer, so, it's going to, guide us into this business. We expect we'll finalize this agreement in next month or so.

Chris Souther (Research Analyst of Sustainable Energy and Technology)

Okay. And then, maybe just on the, the battery pack manufacturing, relationships that you called out in the letter and, and in the and earlier on the call. Can, can you talk a bit about how that fits into the overall customer strategy? Do, do the larger customers you've, you've talked about, like Airbus, Teledyne FLIR, and FLIR, have kind of, you know, in-house pack manufacturing, or is it around kind of standardized cells for specific applications for smaller customers? Can you just kind of, you know, talk through what those relationships mean?

Kang Sun (CEO)

The Amprius Lab in Fremont, okay, will have 10 times more capacity than what we have today. That's very, very significant. In addition to that, you know, we will have this large tool in place. This is going to improve our battery performance as well, because we have better uniformity, we have better control over the our anode manufacturing tier. At this time, we still customize our batteries, each design for specific customers, for major customers. For the smaller customer, of course, they take what we have here. Ultimately, not only we want to standardize the battery cell, the industry is moving to that direction as well.

Chris Souther (Research Analyst of Sustainable Energy and Technology)

Okay. on, on the pack side, though, you called out visiting 2 pack manufacturers. Are, you know, as you're kind of starting to standardize the cells, is it, you know, more standardized packs that you'd expect as well?

Kang Sun (CEO)

Yeah, we have, Chris, we have two types of customers. One type of customer is OEM, for example, Airbus. You know, we work with them directly. Since we are a cell, battery cell manufacturer, so we rely on our customer rely on the pack company or the module company to put those cell together and make a module and a pack for their commercial application. The pack companies are very important customer of Amprius Technologies as well. Those two customers we visited are the leaders in this business. They already have a standardized module to supply to the industry. This one, the main purpose of visitor is to discuss long-term working relationship supply agreements from now to 2025 and beyond. This is very important because we have 500 MW facilities is under construction.

By the time we finish, okay, we need to have full capacity operation. This was the purpose of this visit. You know, we have very good relationship with the two customers at this time.

Chris Souther (Research Analyst of Sustainable Energy and Technology)

Good. That's great to hear. I'll hop in the queue. Thanks, guys.

Operator (participant)

Thank you. Our next question is from Tim Moore with EF Hutton. Please proceed with your question.

Tim Moore (Managing Director and Senior Equity Research Analyst)

Thanks, and your commercial success is quite evident, with 27 total customers shipped this quarter, up from 16 a year ago, and 19 in the March quarter. You know, as I think out to your added capacity and that plan for 2025, how do you prioritize the production for specific customer proposals that come across your desk? I mean, clearly, the US Army safe cell development has been in the works since 2 summers ago. You know, the BAE Systems stratospheric flight batteries were nice headline accolades. But can you maybe share and rank maybe how you handle the incoming opportunities and prioritize them? Is it, you know, is it this year you're trying to demonstrate a wider range of applications for your offerings, like solar and flight and army?

Is it really more based on something like sales potential three years out from a single customized customer?

Kang Sun (CEO)

Yeah, Tim, serve our existing customers certainly is our priority, right? Those customers show the loyalty to us. We have, for example, Airbus. We have been, we have been working with them since 2018. Existing customers certainly is our priority. You know, they have priority on the capacity and location. We have a lot of inquiries from the market. That's the reason we build a new capacity. The Fremont capacity could be 10 times more production capacity than what we have today. This is very, very helpful for us to develop new customers.

Tim Moore (Managing Director and Senior Equity Research Analyst)

That, that's helpful. I mean, your company clearly has a lot of great advantages beyond just power density and fast charge time and your healthy balance sheet. You know, obviously you're not solely a developer, but you're actually doing manufacturing with firm orders and production in-house. Do you, you know, as you kind of approach new customers and new prospects, are you seeing anything in particular that you can point to that's maybe helping you win orders better? Is it extreme fast charge? You know, the 0% to 80% State of Charge in 6 minutes? Is it... Or is it really the power density? Is one thing over another, really kind of the icing on the cake to win orders?

Kang Sun (CEO)

Tim, for Amprius today, is focusing on aviation markets. For aviation markets, three top priorities: safety, energy, and the power. They cannot miss any one of those, because the safety is absolutely important for aviation. Our company in the leadership position for safety. We passed the United States Army military spec for safety. Secondly, the energy is very important because this dictates how far they can fly. This is very, very important for them. Otherwise, they don't have any commercial value if they cannot fly far enough. The third one is the power. They need have power to lift off and then landing. This is the reason that Amprius has a lot customer inquiries, because if you look at the market, there is almost no battery chemistry today can deliver what we have here.

In addition to safety and have very little compromise between the power and the energy. As our news release published a few days ago, we have a 400 Wh/kg battery can deliver 10C power capabilities.

Tim Moore (Managing Director and Senior Equity Research Analyst)

Great, Kang. That's very helpful. I'll save my questions for offline later. Thanks.

Kang Sun (CEO)

Thanks.

Operator (participant)

Thank you. Our next question is from Abhi Sinha with Northland Capital Markets. Please proceed with your question.

Abhi Sinha (Managing Director and Equity Research Analyst)

Yeah, hi, thanks for taking my question. Just, just on the customers, I just want to press on more on that. If you could talk about the process of acquiring a new customer, like, what does it take in terms of the process and the timeline before you get an order? More importantly, if you could talk about the feedback that you get from the customers from whom you are not able to get the orders, like, what do they have to say?

Kang Sun (CEO)

Okay. First, let's talk about the what do they want in terms of product specs. Of our customer, basically, as I mentioned earlier, contain three things, okay? Safety, energy, and the power. Now, without those three, performance parameter meet their spec, and there is no discussion. Yeah. Those are very, very important parameters we need to deliver. Now, in addition to that, and the customer, we don't get an order. Normally it's a capacity issue. This is why the Amprius has been focusing on the capacity expansion, about 12-18 months ago. That's our primary focus. The customer will not engage with us if we cannot guarantee, okay, we can support their growth, for example, in the next 24 months at least.

The customer I have visited in Europe and in United States recently, they basically ask us to guarantee until to 2026. They want to see, okay, there is a roadmap to the capacity expansion before they place order.

Abhi Sinha (Managing Director and Equity Research Analyst)

Thank you. That's helpful. Just on that, how, so when you go to a new customer, when you provide a demo or something, how long does it take for them to approve or, or to place an order?

Kang Sun (CEO)

Varies. Okay. Some customer takes about seven, eight months, be done, because they take our standard of pro-products, they take a test, they see other people use it. So it's, it's relatively easy. Yeah, for the new program, start from the, from the scratch, okay, they have a different technical spec to meet. That usually take a year and a half. Definitely, in aviation, is much shorter than the electrical vehicle at this time, okay? In the future, the lead time may be longer because when we have... At this moment, the most customer we are working with, are unmanned flying devices, okay? Like super satellites, drones. Okay, once we get a passenger carrying vehicle, then the time of development will take longer.

When we see the development, time, okay, this is two parts. One part is our battery development, another part is our customer's own product development.

Abhi Sinha (Managing Director and Equity Research Analyst)

All right. Thank you very much, sir.

Operator (participant)

At this time, this concludes our question and answer session. If you have any additional questions, you may contact Amprius Investor Relations team at [email protected]. I'd now like to turn the call back over to Dr. Sun for any closing remarks.

Kang Sun (CEO)

Thanks again, everyone, for joining us today. I'd also like to thank our employees, partners, and the shareholders for their continued support. As a reminder, you may learn more about our company from the additional updates and learn about upcoming events and presentations from the Investor Relations section of our website. We look forward to updating you on Amprius progress on our next call or beta.

Operator (participant)

Thank you for joining us today for Amprius Technologies Second Quarter 2023 Earnings Conference Call. You may now disconnect.